I am drafting an invoice template to send to clients and I am toying with the idea of including a late payment clause. I would like it to be as nice as possible whilst remaining assertive.

Assuming I am including one (you tell me if its worth it) would this suffice:

Please note, simple interest will be charged at a rate of 10% on the outstanding amount if not paid within 30 days from the date of this invoice

is there anything legally I have ommited

thanks

charged at a rate of 10%

per hour, day??

I put it in initially but changed the wording and forgot to replace it! thanks!

“I would like it to be as nice as possible whilst remaining assertive.”

There is nothing nice about applying a late payment charge, they haven’t paid so you are charging interest simple.

Just look at any invoices you have received from large organisations and copy that.

Fair enough Dunc, I see your point!

You should express the interest rate as base plus X%. The total interest should be inline with your overdraft interest rate as anything if challenged wouldn’t be honoured as you would be seen to profiting from their late payment rather been compensated.

“We maintain the right to charge interest at 3% over base rate(0.5%)so that we may continue to provide our services/goods at the best possible rates.”

If you do need to charge them interest the calculation should be provided with the charge most use:

amount overdue x 3.5% / 365 days x amount of days overdue.

Also think about offering a discount for early payment as this usually has a better effect than charging interest which if not operated correctly is hard to enforce.

I build a small amount extra into my invoicing and offer a 10% discount for paying within 28 days – hardly ever have any late payers.

From memory you have to use pretty specific wording on ivoices to allow any possible claims to be made under the late payment of commercial debt act. I should imagine if the wording is not spot on the courts may uphold any claim. – Google is probably your friend.

30 working days or 30 calendar days – you need to be specific. Also remember credit is a gift which you can take away at any time.